Coinbase to Cut a Fifth of Its Workforce in a Second Round of Layoffs
Coinbase will reduce a fifth its workforce after a June 2022 staff reduction. This is in an effort to preserve its assets in the face of a severe downturn in the crypto industry.
In recent months, some of Silicon Valley’s largest companies have been making steady job cuts announcements.
The company plans to cut around 950 positions for the quarter ending in March, According to a blog article Written by Brian Armstrong (CEO), Jan. 11.
According to the blog post, the company would send emails to the employees affected regarding their personal accounts and will revoke access from company systems.
Coinbase had already slashed 18 percent of its workforce last June in a bid to save on operational costs, with roughly 4,700 employees remaining at the end of September after the cuts.
The new layoffs will result in reduced expenses of $149–163 million for the first quarter of 2023, said the company’s CEO.
This, along with other restructuring actions, would reduce operating expenses by 25%.
Armstrong added that Armstrong had also mentioned that Armstrong was involved in many projects. “lower probability of success” The site would be taken down.
The exchange expects 2023 adjusted earnings before interest tax, depreciation, amortization and amortization losses (EBITDA), to remain within $500 million. “guardrail” Set last year.
Coinbase CEO says Crypto will Survive the New Crisis
He also blamed recent crypto sector pressure on “unscrupulous actors in the industry,” FTX and its disgraced founder Sam Bankman Fried are the two.
The industry was rocked following the collapse of FTX, one the industry’s biggest players, in an $8 billion fraud scheme and the subsequent investigation by the U.S. Department of Justice and the Securities and Exchange Commission (SEC).
Armstrong claimed that Coinbase would benefit from the collapse in FTX since it is no longer the largest competitor.
“Coinbase is well capitalized, and crypto isn’t going anywhere. In fact, I believe recent events will ultimately end up benefiting Coinbase greatly (a large competitor failing, emerging regulatory clarity, etc.), and they validate our long-term strategy,” Armstrong said.
He said that a focus on better crypto regulations and oversight would validate the company’s decision on going public.
Despite the recent bankruptcies of Voyager Digital, FTX and other crypto trading companies, Coinbase CEO John C. Smith insists that the industry isn’t going anywhere. He compared the situation to that of the dot.com boom in the early 2000s.
“Just like we saw with the internet, the most important companies not only survive but thrive during down markets by being rigorous with cost management, and continuing to build innovative products,” Armstrong noted.
The Market remains volatile, and Crypto continues to fall dramatically last year
As traders abandon riskier investments during a global economic downturn, cryptocurrencies have also suffered.
Bitcoin lost 58 per cent of its value over the past year while Coinbase shares fell more than 83%.
After Coinbase went public in April 2021, its share price has since plummeted, with the stock trading below $40, after surging as high as $429.54 on the day of its debut on the Nasdaq, reported CNBC.
Coinbase’s debt-holders saw their bonds, which mature in 2031, trade near $0.50 on the dollar following the collapse of FTX.
At the end of the third quarter, the crypto company still had approximately $5 billion in cash and equivalents.
After reviewing multiple scenarios for the company’s annual revenue estimates, Armstrong said, “It became clear that we would need to reduce expenses to increase our chances of doing well in every scenario” That was all there was “no way” You can do it without having to reduce your headcount.
Big Tech and Crypto Firms Experience Massive Job Losses
Coinbase was among other tech companies to announce the acquisition Job cuts, after many firms went on a hiring spree during the pandemic.
Armstrong acknowledged that Armstrong crypto exchange Had grown “too quickly” During the bull market, I was too optimistic.
“Over the past 10 years, we, along with most tech companies, became too focused on growing headcount as a metric for success. Especially in this economic environment, it’s important to shift our focus to operational efficiency,” Armstrong said.
Coinbase had Plans for February 2022 It will add 2,000 new jobs in its product, engineering, design, and support team.
Armstrong stated that he wants the company to succeed. “return to small, nimble teams that are able to get more done” and can move quickly, as they return to their start-up roots.
Amazon continues to be a great resource. said it would cut 18,000 jobs last week, more than initially planned, wrote CEO Andy Jassy in the company’s blog.
Salesforce also announced that it would reduce its staff By more than 7,000 or 10% in a Filing with the SEC by January 4.
Twitter’s CEO Elon Musk last year saw at least 50% of its employees be fired. Meta terminated more than 11,000 positions, or 13 percent of its staff.
The downturn in crypto and tech has also led to the reduction of staff at Kraken, Gemini, and Genesis Crypto Firms.
Bryan S. Jung, a New York City native and resident, has a background in politics as well as the legal industry. He graduated from Binghamton University.
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